Carlyle Takes Control of The Very Group in Major Ownership Shift

The Very Group, formerly known as Shop Direct, has transitioned to new ownership, with global investment firm Carlyle now taking control as its major lender. This change sees Abu Dhabi-based media group IMI continuing its involvement as a key stakeholder, reinforcing their commitment to the e-commerce giant which operates the Very and legacy Littlewoods brands. This strategic shift is heralded as a significant positive for The Very Group, providing a strengthened capital base and enhanced financial flexibility crucial for underpinning future investments and long-term growth ambitions.

Both Carlyle and IMI expressed strong confidence in The Very Group, its established brand position, management team, strategic direction, and considerable long-term growth potential. This endorsement is particularly significant given their support for the business since 2021. Moving forward, the investment firms will collaborate closely with the company’s management to execute key strategic priorities, focusing on fostering innovation and leveraging cutting-edge technology and data analytics to continuously improve the customer offering and experience.

This ownership transition marks the end of an era for the Barclay family, who no longer hold any involvement in the business after more than two decades at the helm. Under their stewardship, The Very Group underwent a remarkable transformation, evolving from a traditional catalogue-based retailer into one of the United Kingdom's leading online businesses. Currently chaired by former Conservative Chancellor Nadhim Zahawi, the company boasts annual revenues exceeding £2 billion and serves a substantial customer base of 4.4 million individuals.

The Barclay family had previously explored options to sell the business. While specific details regarding the value of the latest transaction were not disclosed, reports have speculated a valuation of approximately £2.5 billion. This figure is understood to be less than the family had initially hoped for. The divestiture of The Very Group comes as the Barclay family has faced challenges in recent times, losing control of several other businesses due to difficulties in servicing significant loans, with Carlyle and IMI having initially become involved with Very earlier this decade through substantial lending to the group.

Despite the changes in ownership at the holding company level, The Very Group itself is understood to be in robust financial health. Recent results for the year ending June showed a pre-tax loss of £505.4 million, which was primarily attributed to a write-down of an inter-company loan made to the Barclay family’s holding company in preparation for the lender takeover. Other financial indicators were notably positive, with adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) increasing by 15.9% to £307.1 million. The adjusted EBITDA margin also saw a significant rise to 14.7% from 12.5%, representing the highest earnings margin the company has ever achieved. This improvement was driven by a strategic focus on more profitable sales, even as overall revenue experienced a slight dip.

Robbie Feather, CEO of The Very Group, commented on Monday that the new ownership deal signifies "an important milestone for The Very Group as we move into an exciting new phase of growth." He expressed delight at the continued partnership with Carlyle and IMI, highlighting that their ongoing backing provides a stronger foundation. This foundation will enable the company to effectively execute its strategy, increase vital investment in technology and enhance the customer experience, ultimately building on the strong momentum already established across the business.